A body corporate is receiving manpower supply services from non corporate agency. in this case, receiver is liable to pay ST on 75% of the services received. I wish to know the following points regarding this:
1- how much cenvat can be availed?
2- what will be the accounting entries for st liability on RCM, cenvat & other relevant ledgers?
Cenvat can be availed on 25% on the basis of vendor's invoice.
Balance 75% paid by the recepient can be availed as cenvat based on the sevice tax challan after making payment of tax.
As regards accounting is concerned:
Firstly liability of service tax has to be created with a debit to a Suspense A/c
After making payment of service tax, the amount in suspense A/c can be transferred to regular cenvat credit A/c.
Otherwise, all other accounting will remain the same.
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